What are the best IPO stocks to buy and watch in 2021? Led by Upstart (UPST) and 360 DigiTech (QFIN), here’s a look at five stocks that have gone public since 2018 and expect between 25% and 425% earnings growth this year.
X
Cambium Networks (CMBN), Dynatrace (DT), and Azek (AZEK) fill out the list.
Built using MarketSmith, the screen filters over 8,300 stocks in the IBD database for only those companies that meet the criteria listed below.
UPST stock, QFIN and all the IPO stocks on this screen must:
- Have gone public since 2018.
- Trade 200,000+ shares per day on average.
- Be less than 15% below their 52-week highs.
- Expect 25% or higher EPS growth in 2021.
- Have sales growth above 25% last quarter.
- Earn a Composite Rating above 80.
Stock Checkup requires a Composite Rating of 95 or higher to earn a passing grade. But newer IPOs sometimes have not been trading on the stock market long enough — or lag on other metrics — to meet that benchmark. While shares of UPST stock, Dynatrace and Azek come up short, they have other characteristics that make them worth watching.
Take UPST stock for example. Founded in 2020 by former employees Google, Upstart leverages cloud=based artificial intelligence (AI) to streamline affordable consumer credit while reducing the risks and costs of lending for its bank partners. The San Mateo Calif.-based company has already originated over $9 billion in loans, with 71% fully automated.
Upstart just announced the purchase of Prodigy Software, a provider of cloud-based automotive retail software. UPST stock soared on the news and is on pace to close Friday’s session with more than a 100% gain for the week.
In addition to the Alphabet (GOOGL) pedigree, UPST stock is boosted by analyst estimates of 400% earnings growth for the current quarter and a 425% EPS increase for the full year. The leading cloud computing and AI stock has also generated average annual sales growth of 60% over the last three years.
Meanwhile, QFIN stock and CMBM stock earn the highest=possible 99 Composite Rating. That means they’re outperforming 99% of all stocks in terms of key stock-picking traits.
Top IPOs Near Buy Points
UPST stock, QFIN stock and CMBM stock are currently extended beyond buy range from their latest breakouts. Meanwhile, Dynatrace and Azek are testing recent buy zones.
After zooming to a new high in February, Dynatrace fell back below its buy point but found support at its 10-week moving average. Newer IPOs can be volatile, and DT stock has made a strong, but rocky run as it climbs back into buy zone. Look for the enterprise software firm’s relative strength line to reverse and start trending higher.
Azek has shown somewhat similar action. After breaking out in earlier in the year, maker of building products retreated. Azek is now trying to hold support at its 10-week line. The company posted 650% EPS growth in Q4.
IPOs On Leading Stock Lists
Despite they’re relative youth, several of these leading IPOs have earned a spot on IBD’s exclusive stock lists.
CMBM stock, QFIN stock, Dynatrace and Azek are all on IPO Leaders. Dynatrace and QFIN stock have also secured placement on the IBD 50 list of leading growth stocks.
QFIN stock also made Sector Leaders, IBD’s most stringent screen, which trounced the S&P 500 19.8% to 1.5% in January and February.
Top IPO Stocks Expecting 25% To 425% EPS Growth In 2021
| Company | Symbol | EPS Est Cur Yr % | Sales % Chg Lst Qtr | Comp Rating | RS Rating | EPS Rating | SMR Rating |
|---|---|---|---|---|---|---|---|
| Upstart Holdings Inc | UPST | 425 | 39 | 86 | 97 | 31 | C |
| Dynatrace Inc | DT | 103 | 28 | 90 | 67 | 98 | A |
| Cambium Networks Corp | CMBM | 45 | 29 | 99 | 98 | 80 | A |
| Azek Company Inc Cl A | AZEK | 31 | 28 | 90 | 52 | 99 | A |
| 360 Digitech Inc Cl AAds | QFIN | 25 | 48 | 99 | 97 | 98 | A |
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
YOU MIGHT ALSO LIKE:
SQ Stock, ETSY, CROX Lead 16 Stocks Expecting Up To 900% Q1 Growth
Uncover The Best Stocks To Buy And Watch With IBD Stock Screener
Track Market Trends And Find Top Stocks With This Simple 3-Step Routine
Learn How To Read Stock Charts And Find The Best Stocks To Buy And Watch
